The expenditure cycle is helping a company operate its business, and achieve
company objectives. Effective purchasing has a number of goals, including
minimizing cash expenditures and maintaining quality. The methodology a
company uses for purchasing is governed by the expenditure cycle, which is the
continuous flow of purchasing activities in which a company engages.
(Wright,2018) Your expenditure cycle would be creating purchase orders from
various employee requests for more paper, pencils and print cartridges, and calling
the office supply store to place the order using the purchase order. Once the
items were delivered, accounting would approve the invoice for payment and cut
the check (Wright,2018) I found this article THE EXPENDITURE CYCLE – Part I
First pass at Ch1 (swlearning.com) which describes the cycle as the mirror image
of the revenue cycle. Businesses need resources in order to conduct their
business–to produce and sell a product or to provide a service. The expenditure
cycle is concerned with the acquisition of fixed assets, raw materials, or
manufactured components and the use of employee labor to yield a finished
product. As was the case in the revenue cycle, this effort can be viewed as having
both a physical phase and a financial phase. In the accounting cycle well desined
AIS provides adequate controls to ensure certain objectives are met. An integral
part of accounting information systems relates to internal controls. Policies and
procedures can be placed within the system to ensure that sensitive customer,
vendor, and business information is maintained within a company. Through the
use of physical access approvals, login requirements, access logs, authorizations,
and segregation of duties, users can be limited to only the relevant information
necessary to perform their business function. (Tuovila, A. 2020)
Hall, J. (n.d.). THE EXPENDITURE CYCLE – Part I. Sw Learning. Retrieved January 8,
2023, from http://www.swlearning.com/accounting/hall_01/study_notes/05.pdf
Tuovila, A. (2020, November 19). Accounting Information System (AIS): Definition
and Benefits. Investopedia. Retrieved January 8, 2023, from
https://www.investopedia.com/terms/a/accounting-information-system-ais.asp
Wright, T. C. (2018, April 18). What Is an Expenditure Cycle? Your Business.
https://yourbusiness.azcentral.com/expenditure-cycle-24348.html
